Credit growth to reach over 20 percent

(VEN) - According to the State Bank of Vietnam (SBV)’s Monetary Forecasting and Statistics Department, positive signs in credit growth and bank services have been seen in the second quarter of the year, while risks have significantly fallen.

Credit growth is expected to reach over 20 percent this year

The business performance of the banking sector improved in the first quarter of this year and is expected to witness sustainable recovery in the whole year, while bad debts, outstanding loans and risks will tend to reduce. According to credit institutions, internal factors and the external business environment improved, but have not been clear compared to the previous quarters, especially for credit policies, interest rates and exchange rate, management mechanisms and regulations.

As many as 68.3 percent of credit institutions recorded positive growth in business performance in their units in the first quarter of the year, while 92 percent of credit institutions expect better business results this year.

The Monetary Forecasting and Statistics Department announced that liquidity remained good in the banking system and it would maintain positive status in the coming quarters.

In addition to improvements in liquidity, positive signs in credit growth and bank services have been seen since the beginning of the year. Outstanding loans are also forecast to reach the highest growth. According to a business trend survey, credit institutions expect outstanding loans in the whole banking system to achieve growth of 20.09 percent in 2016. In addition, demand for bank services is on a raise, including for loans, followed by payment services.

A business trend survey also showed that risks in the banking sector witnessed an obvious fall in the first quarter of the year, especially for economic organizations and other credit institutions. Almost all banks indicated that overall risks posed by customer groups were maintained at a low or normal level.

The SBV said that a fall in risks of customer groups would be a basis for commercial banks to consider bad debts in the coming time. Around 80-90 percent of credit institutions expect bad debts to be lower by the end of this year compared to 2015.

Gross revenue growth from profits, fees and other services is seen as a way to promote the sustainable development and recovery of credit institutions.